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The first investors in GW Pharma more than two decades ago were a little confused to be invited to visit a greenhouse in Kent. One of them even recalled having to wash sticky cannabis residue off his hands afterwards. In 1998, the therapeutic drugs start-up had little more than a crop of weed and a good idea.

“It was certainly an uphill battle,” admitted chief executive Justin Gover. “We were, after all, dealing with a plant that was highly controversial.”

Today, GW Pharma is worth $4.5bn (£3.5bn) and has won approval for two drugs — Sativex, for multiple sclerosis, and Epidiolex, for epilepsy. If it had been launched today, it would have enjoyed a different response to its fundraising.

Entrepreneurs and investors are rushing into the emerging medical marijuana industry, fuelling a craze reminiscent of the late 1990s dotcom bubble. The billionaire investor Jim Mellon, rapper Snoop Dogg and Innocent Drinks co-founder Richard Reed have taken stakes in speculative companies, many with little experience and scant revenues.

Until now, Canada and America have led the frenzy. In October, Canada became the second country after Uruguay to legalise recreational marijuana. American states such as Colorado, Florida and California had already relaxed laws, but consuming weed for pleasure remains illegal at a federal level.

The expected liberalisation in Canada led to an explosion of “pot stocks” on the Canadian Securities Exchange in Toronto, which was dubbed the “cannabis stock exchange”. Investors piled in and companies achieved sky-high valuations. Cannabis became green gold. Now, as cannabis laws are relaxed across Europe, opportunistic investors are setting their sights on London’s capital markets — bringing the “green rush” to the City.

Nick Davis, chief executive of the law firm Memery Crystal, said he had seen a surge in medical cannabis business since November. Davis is advising 21 companies in the sector; three are planning to list on the AIM junior market and another hopes to list on the main market.

Cannabis is broadly divided into three sectors: recreational, medical and wellness. The wellness sector is the most widely available and is focused on products that use CBD (cannabidiol) oil, a product derived from cannabis that does not make users high. CBD oil is already widely used in beauty products and dietary supplements.

“Between CBD wellness, medical cannabis and pharmaceuticals using cannabis as an active pharmaceutical ingredient, I think we are at the beginning of a new age,” said Davis, who added that comparisons have been made with the “end of Prohibition”.

However, as with the bitcoin boom, the nascent industry has a dark side. Insiders have warned that investors should be wary of unscrupulous individuals darting in to make a quick buck.

“There are a lot of interesting companies being built, but some people are in this only to get rich in the short term,” said George McBride, co-founder of cannabis consultanc

Valuations of listed companies have rocketed. Canopy Growth, which two weeks ago reported third-quarter revenues of C$97.7m (£57m), listed on the New York exchange in May. In nine months, its valuation has soared by 76% to $15.2bn — the combined value of Sainsbury’s and Morrisons. Another manufacturer, Tilray, is worth $7.4bn, more than Marks & Spencer. It reported just $10m in third-quarter revenues last year.

The soaring valuations are driven in part by speculative investors who, having grown fat on mining, gambling and cryptocurrencies, are looking for the next big thing. There is growing interest in medical cannabis from the boom-and-bust mining sector. Clifford Elphick, chief executive of Gem Diamonds, has privately backed Lesotho-based medical cannabis producer Medigrow, which has enlisted adviser Hannam & Partners — led by Ian Hannam, the buccaneering “king of mining” who had to leave JP Morgan after a trading scandal — to drum up $15m from investors, a clear sign mining heavyweights are taking a closer interest.

Some who rushed in early have been burnt. A late 2018 correction in the Canadian markets saw stocks crash after several companies reported shortages of supply. There have been comparisons with the internet boom. David Awram, of Canadian mining investor Sandstorm Gold Royalties said of the dotcom bubble: “A lot of speculative, high-risk money went into the sector, but it took a while to work out what the industry was and find the Amazons and Netflixes.”

In Britain, a handful of start-ups are already hoping to capitalise on the relaxation of cannabis laws in November, which allowed medical — not recreational — cannabis to be prescribed in some cases by specialist doctors. It was legalised in Germany in March 2017.

Until now, cannabis activity in Europe has been limited to investments from family offices or wealthy individuals. More than €500m (£430m) has been invested in European cannabis companies in 12 months, according to a report by research firm Prohibition Partners. It predicts the European market could hit €123bn by 2028, making it the world’s largest.

Among the medical cannabis companies to have raised significant sums already is Oxford-based Beckley Canopy Therapeutics, which in December took investment of £7.4m to develop a range of cannabis-based products for the treatment of pain and to tackle opioid addiction. Richard Reed, Jim Mellon and Annalisa Jenkins, a biotech entrepreneur and philanthropist, all ploughed in cash.

“The institutions will quite quickly follow once they have seen the industry being validated,” predicted Cosmo Feilding Mellen, Beckley’s managing director.

Those that have opted to float in London have so far achieved modest valuations. Sativa Investments, an investment vehicle led by chief executive Geremy Thomas, listed on London’s NEX exchange in March last year and is worth £24.2m. Its aim is to allow British investors to take advantage of the Canadian market by taking stakes in

AIM and the main market have yet to open their doors to listings. “The exchanges have been really nervous, mostly from a reputational point of view,” said one investor. However, the legalisation of medical cannabis after a long- running campaign by the parents of Billy Caldwell, the 12-year-old epilepsy sufferer whose battle to secure a legal supply of CBD oil sparked a national debate, has made the sector more palatable.

At the centre of London’s blossoming cannabis scene is Canadian broker Canaccord Genuity, which has set up a specialist team. Alex Brooks, one of its analysts, knows the industry’s challenges better than most. “It’s fair to say the sector has an image problem,” he said. “People think it’s about stoners, when actually what we’re talking about is treatment for Parkinson’s, drug-resistant childhood epilepsy, or palliative treatment for Alzheimer’s.”

Dean Gainsley, a partner in CannaGlobal, a private equity firm established to invest in cannabis companies, is familiar with the most PR-friendly end of the spectrum. CannaGlobal’s beauty brand, MGC Derma, is already available in stores such as Harvey Nichols. He expects further consumer products to follow.

“London has always been a home for global business, so in a world where cannabis is a global industry, which we are getting pretty close to, it’s inevitable that it is an international home of choice for these companies,” said Gainsley.

Among the companies hoping to join the public market is European Cannabis Holdings, which this month helped secure the arrival in Britain of the first legal shipment of marijuana. It has hired Canaccord Genuity to drum up interest for a listing in London. Emmac Life Sciences, working with Imperial College London to develop treatments for pain relief during surgery, also plans to go public. Both are hoping for chunky valuations.

The flurry of activity has led some to urge caution. America’s financial watchdog has warned of scam artists exploiting the “hot” new industry by falsely promising high returns with low risks.

The Securities and Exchange Commission has charged a Texas investment fund and its founders with “defrauding investors with false promises of massive returns in cannabis-related businesses”.

Even the largest firms have run into scandal. Canadian cannabis dealmaker Andy DeFrancesco, an adviser to cannabis firm Aphria, was forced to defend himself in December after the company was targeted by short-sellers. They alleged he had masterminded a scheme involving shell companies to funnel money from shareholders and towards insiders. Aphria splashed out C$425m to buy cannabis manufacturer Nuuvera in March last year. Later, Aphria admitted its executives and directors had undisclosed stakes in Nuuvera prior to the acquisition — along with DeFrancesco.

DeFrancesco’s name cropped up in Britain last year when European Cannabis Holdings announced that it had raised £3m from investors in October, ahead of a planned listing this year. It also said DeFrancesco would join its board. Mysteriously, he never appeared on the company’s list of board members. Last week, European Cannabis Holdings told The Sunday Times that DeFrancesco was “not involved” any longer. “We didn’t find he was the right fit for us,” said Stephen Murphy, the chief executive.

Along with addressing reputational concerns, any firm hoping to list in London will have to jump through regulatory hoops. Legal opinion is split over how investors will be treated in relation to the Proceeds of Crime Act.

As recreational cannabis is still illegal in the UK, any company receiving investment from Canadian funds that may have made money from sales of the product in Canada could hit trouble.

“Everyone has been spending money on their lawyers getting the right advice to ensure they can go and list,” said McBride at Hanway.

Lenders may need convincing. Robert Jappie, head of crime and regulatory at law firm Mackrell Turner Garrett, said banks in London had so far been “incredibly short-sighted”. He said: “The banks still consider it a risky sector,” adding that it would change “quite quickly”.

Jappie, part of a team set up to advise cannabis companies, said more established firms would emerge in America, Canada and, eventually, Europe. “Some are based on real assets, real performance and real potential, and some are not. Some are based on hype, and that will filter out.”

An ecosystem is quickly growing around the medical cannabis industry in the City. The inaugural London cannabis film festival will take place in May, while a pair of entrepreneurs plan to open Leafpost — the City’s first co-working space for cannabis professionals.

As in America and Canada, there are likely to be corrections along the way as the boom takes hold, but this high looks set to last.

and thanks to Ed. That's what he's for, Chilio.

12.24% live.

up big today.

Yup. I could be wrong, but I think the MMs would have pushed it below 9 by now if they were going to. Time will tell.

30k.

more like that and he's liable to start tearing his stuffed toy apart.

Like, like.

And after all, that's what the filter button is for.

Things get fraught when the SP shrinks day after day. There's room for all shades here. Stay, Pred.

available at 9.17p now; may get cheaper later, or may be MM smoke and mirrors. Who knows?

for a moment - does anyone else use MoneyAM for their live feed? They appear to have tried to migrate today to Shares Magazine - with the predictable, almost inevitable error message.

that we have that little puddle of phlegm cleared from our pigeon chests, let's get back to the job in hand. It looks very much like Friday will see us in the 8s - but for how long? Snooty has prepared a thick wad (apologies, Mr Nob) of grubby notes in preparation, and I'm sure many others have run their fingers around the cracks of their Ford Cortina seats and Naugahyde settees.
Let the show commence!

on offer at 9.275 if anyone's feeling flush.

Don't be a bore, Chilston.

these spats always flare up when the SP is under pressure, that's normal. Bottom line is we are all here and holding because the portfolio appears as far as we can see to be full of promise. I'm not immune, nor are many others here, to the odd b*itch or show of frustration; things are taking a long time, no question, but right now the best that can be said is hunker down and hold - for how long, who knows?

I thought we were focussing on FFWD on this thread. Name at the top suggests so....